Labor share of output has declined since 1947

March 07, 2017

The labor share—the percentage of economic output that accrues to workers as compensation in exchange for their labor—has been declining in the nonfarm business sector throughout most of the post-World War Two era. In the first quarter of 1947, the labor share was 65.8 percent; by the fourth quarter of 2000, it was 62.8 percent. The labor share declined more rapidly after that, dropping below 60.0 percent in 2005 and reaching a low of 56.0 percent in the fourth quarter of 2011. The labor share has been slowly increasing since the first quarter or 2012, climbing back to 58.4 percent by the third quarter of 2016.

Labor's share of nonfarm business sector output, first quarter 1947 through third quarter 2016
Quarter Labor share

Q1 1947

65.8%

Q2 1947

64.9

Q3 1947

65.9

Q4 1947

65.0

Q1 1948

65.1

Q2 1948

65.1

Q3 1948

65.1

Q4 1948

64.5

Q1 1949

64.7

Q2 1949

64.8

Q3 1949

63.6

Q4 1949

64.0

Q1 1950

63.2

Q2 1950

63.6

Q3 1950

62.8

Q4 1950

62.9

Q1 1951

62.6

Q2 1951

63.4

Q3 1951

62.3

Q4 1951

62.9

Q1 1952

63.2

Q2 1952

63.7

Q3 1952

64.0

Q4 1952

63.9

Q1 1953

64.0

Q2 1953

64.2

Q3 1953

64.3

Q4 1953

65.1

Q1 1954

65.3

Q2 1954

64.8

Q3 1954

64.3

Q4 1954

63.9

Q1 1955

62.8

Q2 1955

62.9

Q3 1955

63.2

Q4 1955

63.3

Q1 1956

64.5

Q2 1956

65.1

Q3 1956

65.2

Q4 1956

65.2

Q1 1957

64.7

Q2 1957

65.2

Q3 1957

64.8

Q4 1957

65.3

Q1 1958

66.0

Q2 1958

65.2

Q3 1958

65.2

Q4 1958

64.0

Q1 1959

64.3

Q2 1959

63.9

Q3 1959

64.2

Q4 1959

64.6

Q1 1960

64.4

Q2 1960

65.6

Q3 1960

65.5

Q4 1960

66.4

Q1 1961

66.1

Q2 1961

65.0

Q3 1961

64.6

Q4 1961

64.4

Q1 1962

64.1

Q2 1962

64.4

Q3 1962

63.9

Q4 1962

64.0

Q1 1963

64.1

Q2 1963

63.8

Q3 1963

63.1

Q4 1963

63.4

Q1 1964

62.6

Q2 1964

62.7

Q3 1964

62.8

Q4 1964

63.6

Q1 1965

62.7

Q2 1965

62.7

Q3 1965

61.9

Q4 1965

61.5

Q1 1966

61.5

Q2 1966

62.3

Q3 1966

62.6

Q4 1966

62.3

Q1 1967

62.3

Q2 1967

62.7

Q3 1967

62.7

Q4 1967

62.8

Q1 1968

62.4

Q2 1968

62.1

Q3 1968

62.8

Q4 1968

63.3

Q1 1969

62.9

Q2 1969

63.7

Q3 1969

64.2

Q4 1969

65.0

Q1 1970

65.3

Q2 1970

64.4

Q3 1970

64.1

Q4 1970

64.4

Q1 1971

63.2

Q2 1971

63.2

Q3 1971

62.9

Q4 1971

63.6

Q1 1972

63.6

Q2 1972

62.8

Q3 1972

62.9

Q4 1972

63.2

Q1 1973

63.1

Q2 1973

63.2

Q3 1973

64.1

Q4 1973

64.3

Q1 1974

64.4

Q2 1974

63.9

Q3 1974

64.5

Q4 1974

63.8

Q1 1975

63.2

Q2 1975

62.5

Q3 1975

61.9

Q4 1975

62.0

Q1 1976

61.5

Q2 1976

61.4

Q3 1976

61.7

Q4 1976

61.7

Q1 1977

61.6

Q2 1977

61.6

Q3 1977

61.4

Q4 1977

62.2

Q1 1978

63.2

Q2 1978

61.8

Q3 1978

61.6

Q4 1978

61.5

Q1 1979

62.8

Q2 1979

62.5

Q3 1979

62.7

Q4 1979

63.1

Q1 1980

63.0

Q2 1980

63.6

Q3 1980

63.9

Q4 1980

63.6

Q1 1981

62.3

Q2 1981

62.9

Q3 1981

62.4

Q4 1981

62.9

Q1 1982

64.1

Q2 1982

63.8

Q3 1982

63.9

Q4 1982

63.5

Q1 1983

63.1

Q2 1983

62.1

Q3 1983

61.2

Q4 1983

61.2

Q1 1984

61.6

Q2 1984

61.3

Q3 1984

61.4

Q4 1984

61.5

Q1 1985

61.4

Q2 1985

61.3

Q3 1985

61.0

Q4 1985

61.8

Q1 1986

61.7

Q2 1986

61.8

Q3 1986

62.2

Q4 1986

62.9

Q1 1987

63.1

Q2 1987

62.8

Q3 1987

62.9

Q4 1987

62.9

Q1 1988

63.3

Q2 1988

63.3

Q3 1988

63.2

Q4 1988

62.8

Q1 1989

62.7

Q2 1989

61.9

Q3 1989

61.7

Q4 1989

62.3

Q1 1990

62.4

Q2 1990

62.5

Q3 1990

62.6

Q4 1990

63.1

Q1 1991

62.8

Q2 1991

62.6

Q3 1991

62.5

Q4 1991

62.7

Q1 1992

63.0

Q2 1992

62.7

Q3 1992

62.6

Q4 1992

62.2

Q1 1993

61.8

Q2 1993

62.2

Q3 1993

61.8

Q4 1993

61.7

Q1 1994

61.0

Q2 1994

61.1

Q3 1994

61.1

Q4 1994

60.6

Q1 1995

60.7

Q2 1995

60.6

Q3 1995

60.7

Q4 1995

60.7

Q1 1996

60.9

Q2 1996

60.6

Q3 1996

60.6

Q4 1996

60.6

Q1 1997

61.0

Q2 1997

60.4

Q3 1997

60.4

Q4 1997

61.1

Q1 1998

61.7

Q2 1998

62.1

Q3 1998

62.1

Q4 1998

61.9

Q1 1999

62.1

Q2 1999

62.0

Q3 1999

61.8

Q4 1999

61.8

Q1 2000

63.9

Q2 2000

62.5

Q3 2000

63.4

Q4 2000

62.8

Q1 2001

64.3

Q2 2001

63.1

Q3 2001

62.8

Q4 2001

62.4

Q1 2002

61.4

Q2 2002

61.6

Q3 2002

61.2

Q4 2002

61.3

Q1 2003

60.8

Q2 2003

61.0

Q3 2003

60.3

Q4 2003

60.5

Q1 2004

60.0

Q2 2004

60.2

Q3 2004

60.6

Q4 2004

60.1

Q1 2005

59.4

Q2 2005

59.3

Q3 2005

59.0

Q4 2005

58.9

Q1 2006

59.4

Q2 2006

59.0

Q3 2006

59.0

Q4 2006

59.6

Q1 2007

60.4

Q2 2007

59.7

Q3 2007

59.1

Q4 2007

59.3

Q1 2008

60.2

Q2 2008

59.4

Q3 2008

59.4

Q4 2008

60.4

Q1 2009

58.2

Q2 2009

58.8

Q3 2009

58.3

Q4 2009

57.9

Q1 2010

57.0

Q2 2010

57.2

Q3 2010

57.0

Q4 2010

56.7

Q1 2011

58.1

Q2 2011

57.2

Q3 2011

57.3

Q4 2011

56.0

Q1 2012

56.9

Q2 2012

56.6

Q3 2012

56.5

Q4 2012

58.1

Q1 2013

56.5

Q2 2013

57.2

Q3 2013

56.8

Q4 2013

56.2

Q1 2014

57.4

Q2 2014

56.6

Q3 2014

56.3

Q4 2014

57.0

Q1 2015

57.1

Q2 2015

57.3

Q3 2015

57.3

Q4 2015

58.0

Q1 2016

57.9

Q2 2016

58.4

Q3 2016

58.4

Before 1950 or so, most economists agreed that labor’s share of national output was relatively constant. In the late 20th century, however—after many decades of relative stability—the labor share began to decline in the United States and many other economically advanced nations, falling to unprecedented lows in the early part of the 21st century.

These data are from the Labor Productivity and Costs program. To learn more, see “Estimating the U.S. labor share,” by Michael D. Giandrea and Shawn A. Sprague, Monthly Labor Review, February 2017. The labor share is the percentage of economic output that accrues to workers in the form of compensation. It is calculated by dividing the compensation earned during a certain period by the economic output produced over the same period. The labor share is an indicator of the extent to which workers share in the economy’s output.

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Labor share of output has declined since 1947 on the Internet at https://www.bls.gov/opub/ted/2017/labor-share-of-output-has-declined-since-1947.htm (visited July 19, 2018).

OF INTEREST
spotlight

Recent editions of Spotlight on Statistics